Why Do I Need A Bad Credit Mortgage?

You will only need a bad credit mortgage if your credit file has suffered for whatever the reason. If you have been turned down for mortgages or loans then you may be considered a higher credit risk. If this is the case then a bad credit mortgage may be the only mortgage you can get initially.

What Is The Difference Between A Mortgage And A Bad Credit Mortgage?

Essentially the difference is likely to be the interest rate, it will almost certainly be higher for a bad credit mortgage because the lender is taking a greater risk.

Whilst there are different types of mainstream mortgages available, essentially the two main ones are repayment mortgages and interest only mortgages.

With the repayment mortgage, your monthly payment pays some off the loan, and some off the interest. With interest only mortgages it is only the interest that is being paid off, so at the end of the term you will still have to pay the loan. This is usually paid by some other financial commitment that you have made, or by selling you house if it is worth as much or more than the outstanding debt.

Can A Bad Credit Mortgage Improve My Credit Rating?

It is quite likely that if you make you repayments on time, stay with your lender for a period of perhaps three years or more, have no defaults, CCJ's or other adverse credit situations in this time you credit will start to be repaired. At this time you may then be able to be offered a wider range of mainstream mortgages which may work out cheaper than bad or adverse credit mortgages.